Jump Trading hit with class action lawsuit alleging it manipulated Terra.

In May 2023, a putative class action lawsuit was filed in the U.S. District Court for the Northern District of Illinois against Chicago-based trading firm Jump Trading LLC and Jump Crypto president Kanav Kariya, alleging they secretly manipulated the market for the Terra ecosystem’s algorithmic stablecoin TerraUSD (UST). The complaint, brought by plaintiff Taewoo Kim on behalf of U.S. purchasers of UST and interest-bearing aUST between May 23, 2021 and May 31, 2022, claims Jump was an early financial backer and market maker for Terraform Labs and the Terra blockchain, and that it entered a series of agreements to borrow LUNA and provide market-making services for LUNA, UST and aUST in exchange for the right to buy LUNA at steep discounts. According to the filing, when UST briefly lost its dollar peg in May 2021, Terraform Labs and CEO Do Kwon allegedly coordinated with Jump to conduct large, undisclosed purchases of UST—over 62 million tokens—to restore the peg and create the false impression that Terra’s algorithm alone had stabilized the coin. The complaint alleges this intervention was concealed from the market while Terraform and Kwon publicly promoted the recovery as proof of UST’s resilience, and that Terraform later rewarded Jump by modifying their agreements to deliver more than 61.4 million LUNA at a more than 99% discount, which Jump allegedly resold for over $1.28 billion in profit. The suit asserts violations of the Commodity Exchange Act and related theories based on alleged manipulation and deception, tying Jump’s conduct to the broader Terra collapse in May 2022 that wiped out tens of billions in value. Jump Trading has not been accused of wrongdoing by regulators in this matter, and the class action remains a private investor case.

✨ AI-generated background, compiled from web sources — not editorial content.

More coverage

• Jump Trading made $1.28B propping up Terra: Court records | Fortune (fortune.com)
• Jump Trading Responds to Terraform Lawsuit, Claims It Aims to Shift ... (binance.com)
• [PDF] patterson-v-jump-trading-llc.pdf (skadden.com)
• [PDF] 1:23-cv-02921 Document #: 1 Filed: 05/09/23 Page 1 of 44 PageID (rgrdlaw.com)
• Kim v. Jump Trading, LLC et al, No. 1:2023cv02921 - Justia Law (law.justia.com)

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• Terra
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• Jump Crypto